The UAE is preparing to launch its digital dirham in 2025 to improve financial stability and innovative capabilities.
Digital Dirham Release Plan
The Central Bank of the UAE expects the blockchain-based version of the dirham to be released in the fourth quarter of 2025. Governor Khaled Mohamed Balama said that the digital dirham will enhance financial stability and help combat financial crimes. Additionally, it will enable the development of innovative digital products and services, lower costs, and expand access to international markets. Both the digital and physical versions of the dirham will be accepted in all payment channels.
Stablecoin Development in the UAE
In June 2024, the UAE's central bank approved a licensing framework for regulating stablecoins, which includes issuance, licensing, and supervision of payment tokens. Following this, Tether announced plans to launch a dirham-backed stablecoin in partnership with local companies Phoenix Group and Green Acorn Investments. By October 2024, AED Stablecoin received in-principle approval to issue a regulated dirham-pegged stablecoin.
International Recognition of Stablecoins
Stablecoins backed by the US dollar and euro have also gained recognition in the UAE. In February 2025, Dubai's Financial Services Authority recognized Circle's USDC and EURC as stablecoins under its crypto token regime.
The development of the digital dirham and stablecoins in the UAE demonstrates the country's commitment to innovation and enhancing its financial infrastructure.
